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The Ethiopian leather industry is a relatively older industry with more than 80 years of involvement in processing leather and producing leather products. The industry bases itself on the country’s livestock resources. Indeed Ethiopia possesses one of the world largest livestock populations. This enormous population of livestock provides ample opportunity for the development of the leather industry in the country. In addition to possessing large livestock population, Ethiopian cattle hides are well known internationally for their fine grain pattern and good fiber structure and are ideal for making shoe uppers. Correspondingly, the Ethiopian highland sheepskins have got worldwide reputation in terms of quality, thickness, flexibility, strength, compact structure and clean inner surface. It is also estimated to assume for about 70% of the national sheepskin production found to be very suitable for the production of high quality leather garments, sport gloves and has great demand - on the international leather market.
Sub-sectors of ELIDI
The Ethiopian leather industry encompasses three major industrial sub-sectors or components: the tanneries processing and producing the leather, the footwear manufacturers (shoe producing), and the leather goods and garments manufacturers. They are medium and large whereas the micro enterprises particularly in footwear manufacturing area operate in the informal sector.
The history of modern leather industry in Ethiopia dates back to the middle of 1920s. It was introduced by Armenians mainly in response to the growing local market demand for leather shoe. As a result, the first two tanneries were established and vertically linked to two shoe factories: Darmar tannery & shoe factory (the present Awash tannery and Anbessa shoe factory) and Addis Ababa tannery & Asco shoe factory (the present Addis tannery and Tikur Abbay shoe factory). Currently, there are 22 tanneries operating in Ethiopia with installed daily capacity of producing 5,760 square feet of hides and 101,600 square feet of skins. The actual daily capacity utilizations, however, are 81% and 44.97% for hides and skins, respectively. Taken as a whole, these tanneries have created direct job opportunities for more than 4,000 people. Out of 22 tanneries, 9 are 100% export oriented in semi-processed skins mainly pickle and wet blue. The other tanneries managed to produce finished leather products by introducing new technologies and thus, are selling almost 20% of their products in the local market. The shoe manufacturers and leather goods and garments producers recline under the canopy of ‘The Leather Products Industry’ within the leather and leather products industry. These are manufacturers of leather shoe, shoe uppers, leather garments, bags, and stitched upholstery and belong both to the formal as well as the informal sector of the economy. The footwear (shoe) industry is, in - turn, composed of two sub-sectors: the larger mechanized shoe industries sub sector and the smaller production units – micro, small and medium enterprises including the informal ones. Currently, there are 13 medium and large mechanized footwear factories in the formal sector, the first shoe factory being established in 1938, with installed daily capacity of 13,650 pairs of shoes. Nevertheless, the actual current capacity utilization of these firms is 47.6%. They primarily produce and export men’s and children’s shoes. Although there are shoe factories producing ladies shoe for the local market, they were not able to export for they lack the necessary technology and trained manpower. Out of 13 shoe factories, almost half of them are currently under expansion, mainly by sub-contracting work for foreign companies, and investment. On the other hand, there are 16 enterprises operating in the leather goods and garments sub-sector. Taking into account only major leather goods and garment producers (14 in number), the overall installed capacity and actual outputs per day were 700 pieces and 309 pieces, respectively. More specifically, they have a daily installed capacities ranging between 20–150 pieces, however the actual factory outputs ranges from 10–60 pieces of garments per day. The reasons behind this low capacity utilization are the size and static state of the domestic market, lack of competitiveness and negligible penetration of the export market.
Vision of the Institute
To enable the Ethiopian Leather Industry competitive in the world market.
Mission of the Institute
To make Ethiopia, more beneficiary from leather sector by providing transparent, efficient and sustainable services in investment, production and marketing.
Objectives of the Institute
The objectives of the Institute are:
- Facilitate the development of the leather and leather products industry by helping the technology and knowledge transfers so as to upgrade production, quality and marketing required for international exposure
- Assist the investments in this sector in order to connect Ethiopian companies with the International markets so as to enable this industry become competitive and beget rapid development.
- Provide constant trainings in order to sustain skills and knowledge upgrading of the various actors in the industry.
Powers and Duties of the Institute
The institute have the following powers and duties to:
- 1- formulate policies, strategies and programs that assist in the facilitation of the development of leather and leather products industries, and implement the same upon approval;
- 2- collect, analyze, organize and transfer to the sector’s data center and disseminate to users, as may be appropriate, data necessary for the development of leather and leather products industries;
- 3- prepare and disseminate project profiles that may be helpful in expanding investments in the leather and leather products industries, conduct feasibility studies for those investors desiring to engage in the sector, follow up project implementation and provide remedies concerning problems encountered during implementation;
- 4- advise investors desiring to engage in the leather and leather products industries sector on the selection of technology, negotiation, construction, erection and commissioning;
- 5- prepare and conduct practical trainings on technology, technical matters, marketing and management and other tailor made trainings, that assist the development and competitiveness of the leather and leather products industries sector, and issue certificates to trainees,
- 6- conduct studies and researches to promote the development of the leather and leather products industries,
- 7- provide support and consultancy services concerning production process, production planning and quality control;
- 8- cooperate with government and private institutions with similar objectives, locally and abroad, and encourage similar co-operations between private institutions,
- 9- undertake benchmarking studies that facilitate the development and competitiveness of the leather and leather products industries and assist those conducting similar activity in the sector;
- 10- deliver product-testing services to leather and leather products industries;
- 11- extend support in the creation of input and output linkage;
- 12- conduct market study for leather and leather products industries products;
- 13- identify technologies that can be developed and undertake product development activations;
- 14- cooperate with universities on product development;
- 15- conduct joint research and assist in the strengthening of local research capacity in the sector;
- 16- deliver its services to users at one stop shop;
- 17- collect, as may be appropriate, fees for services it renders;
- 18- own property, enter into contracts and sue and be sued in its own name;
- perform such other activities as are conducive to the attainment of its objectives.